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ASI European real estate fund deploys all first close capital

Aberdeen Standard Investments (ASI) has announced that its European Long Income Real Estate Fund has deployed all first close capital, and is fully financed to target level.

Following the Fund’s first acquisition in Eindhoven, The Netherlands, two further acquisitions were completed in Q4 2020 in Norway and Sweden. A fourth acquisition in Dublin was completed in February 2021.

The latest acquisition of a social housing development in Dublin was subject to securing external financing. The Fund completed a €33.5m Pan-European senior secured loan facility with Deutsche Pfandbriefbank (pbb) for a seven-year term, which has allowed the fund to reach its target leverage level of 25% of the gross asset value.

The Fund entered into a binding loan agreement with pbb in December 2020, which was successfully drawn down in February 2021. The fund was advised on the financing by CBRE.

The fund, which is open-ended in nature, is now considering a number of further investment opportunities that will interest investors looking to participate in further closes for the fund this year.

Troels Andersen, Fund Manager, said: “With government bond yields and interest rates still at historic lows, we believe the attraction of this kind of strategy is greater than ever.  This fund can provide European institutional investors with access to a potential source of long-term, reliable income.

“We’re delighted that the Fund is fully financed to target level. With a strong pipeline of deals being considered, new capital commitments can be deployed swiftly.”

The fund aims to provide long-term, reliable, inflation-protected income streams with reduced volatility in capital values compared with a more conventional real estate fund.

ASI says that this type of real estate has particularly defensive characteristics, investing in assets with long leases and long-term tenants. The objective is to build a diversified portfolio of direct real estate assets located in key Western European markets, with a focus on Germany, France, Benelux and the Nordics.